Last Thursday’s signals were not triggered, as there was no bullish price action at 1.2846.
Today’s GBP/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm London time today.
Short Trade
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2934.
- Put the stop loss 1 pip above the local swing high.
- Move the stop loss to break even once the trade is 25 pips in profit.
- Take off 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to ride.
Long Trades
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2840, 1.2820, 1.2780, or 1.2755.
- Put the stop loss 1 pip below the local swing low.
- Move the stop loss to break even once the trade is 25 pips in profit.
- Take off 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to ride.
The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.
GBP/USD Analysis
I wrote last Thursday that although there was some mild short-term bullishness, the absence of any major scheduled news plus the wide zone the price was in suggested that the price was quite likely to trade sideways and remain below 1.2934 despite the medium-term bullish picture. I was correct that the price would remain below 1.2934, but the action that day was more bearish than I had anticipated. The first thing to note about this pair is that it is acting considerably more bearishly than the EUR/USD, which suggests a weak Pound. There is a long-term bearish trend in force, however there are several support levels close to the current price which are likely to force a prolonged consolidation before the price can fall much further. It is public holiday in London today, which also points towards a probably slow day. I have no directional bias over the short-term, but I think it quite likely the price of this currency pair will fall later this week.
There is nothing important due today concerning either the GBP or the USD. It is a public holiday in the U.K. today.